4160.0.55.001 - Frameworks for Australian Social Statistics, Jun 2015  
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The key concepts relating to economic wellbeing of people, families or households are the economic resources they have available to support their material living conditions, and their control over these resources and conditions. People’s wellbeing is affected by individual circumstances and their lifestyle choices.

There are three key interrelated components of economic wellbeing - income, consumption and wealth. To study these components separately only reveals part of the picture of economic wellbeing.

Income can be used to support current consumption, such as food, clothing, education, housing or leisure activities. Income can also be saved and invested to increase wealth which can be used to support consumption in the future.

Some people with low incomes have considerable wealth, allowing them to maintain consumption levels above their current income by converting some of their wealth into income. Other people may have high incomes and relatively low levels of consumption if they are paying off debts or saving and investing. People with low reserves of wealth may face financial difficulty in times of need, such as during a period of reduced income or substantial unexpected expenses.


Having access to and the ability to manage economic resources means that people are able to acquire the goods and services required to meet their needs and maintain an acceptable standard of living. This includes the consumption of food, clothing, housing, education and leisure activities.

Economic wellbeing also relates to the risk of experiencing financial difficulties in times of need or unexpected expenses, such not being able to pay for necessities or find funds if there is an emergency. These types of economic hardships may also contribute to people experiencing physical, mental and emotional stress.

The distribution of economic resources across the population is important for the wellbeing of people and society as a whole. Societies with a more equitable distribution of economic resources are more likely to have:

  • better health and education outcomes
  • higher levels of trust and social cohesion
  • lower rates of crime
  • greater innovation (National Sustainability Council, 2013).

In a national consultation conducted by the ABS in 2011-12, Australians said that they were concerned about economic disadvantage and inequity, and want to ensure all Australians have basic standards of living (MAP 2013, ABS). In particular, there was a feeling that people should have opportunities to improve their economic wellbeing, regardless of differences in education, socio-economic background or other factors. They also felt that an equitable society contributes to social cohesion.

Economic wellbeing can be monitored using information on:
  • levels of income and wealth
  • distribution of income and wealth
  • sources of income
  • components of wealth
  • consumption patterns
  • experiences of financial stress and missing out.


There are a range of events, pressures and drivers of change that have the potential to substantially affect economic wellbeing. In relation to economic resources, some examples are:
  • the broader economic and social environment
  • economic growth and the resilience of the economy to global economic changes
  • price variability
  • distribution of economic resources across the population
  • poverty, social exclusion and relative disadvantage
  • personal capabilities, including level of education, financial literacy and the ability to manage finances (Connolly, 2014)
  • people having a say in financial decisions that affect them and access to basic financial products such as transaction account, credit cards and insurance (Connolly, 2014)
  • changing family circumstances – family or household composition and the sharing of economic resources within the family
  • life events experienced: health conditions and human functioning, family formation and dissolution, having children, retirement
  • support received from family, friends, community groups, employers, financial institutions and government
  • community and the opportunities it offers, through employment opportunities and being able to purchase safe and quality goods and services.


There are many ways that people, community groups, governments and other institutions can work to improve people’s economic wellbeing in Australia. These may particularly improve an individual's capability to take control over their resources and the decisions that affect their lives. Some examples include actions to:
  • create an economy that:
    • is resilient to shock and allows people to manage risk
    • provides employment and business opportunities
  • provides skill development, training and knowledge to encourage adaptability in a changing world
  • sustains and enhances living standards into the future
  • support social inclusion and enhance the functioning of the social welfare system to assist those most at risk of experiencing economic hardship
  • improve financial inclusion and financial literacy including access to, and understanding of, financial services such as banking and insurance services, and managing debt
  • encourage self-help through community initiatives such as micro-loans and community co-operatives
  • help people to accumulate wealth during their working life to support their consumption needs during retirement or when their economic circumstances change unexpectedly
  • encourage social attitudes towards sustainable patterns of income, wealth and consumption.


To gain a better understanding of economic resources in Australian society, look through the pages on:
  • Work
  • Governance
  • Learning and knowledge
  • Family and community
  • Culture and leisure
  • Health


Organisation for Economic Co-operation and Development (OECD), OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth - The framework describes an ideal set of information about economic resources that might be used to describe the distribution of economic wellbeing among households.

Organisation for Economic Co-operation and Development (OECD), OECD Guidelines for Micro Statistics on Household Wealth - These guidelines provide an internationally agreed set of standard concepts, definitions and classifications for micro wealth statistics and best practice for compiling and analysing wealth statistics.

United Nations Economic Commission for Europe (UNECE), 2011, The Canberra Group Handbook on Household Income Statistics, Second Edition - The framework reflects the current international standards, recommendations and best practice in household income measurement. The framework provides a consolidated reference for those involved in producing, disseminating or analysing income distribution statistics.

System of National Accounts (SNA), 2008 and Australian System of National Accounts (ASNA) - The SNA provides a comprehensive system for measuring the state of the national economy, at the macro level. The ASNA is the framework used to measure Australia’s national economy. It is based on the international SNA and aligns closely with 2008 SNA framework.

Australian Bureau of Statistics, Australian National Accounts: Concepts, Sources and Methods (cat. no. 5216.0) - It outlines the major concepts and definitions, describes the data sources and methods used to prepare the estimates, and discusses the accuracy and reliability of the national accounts. The material is designed to enable users to appreciate and more readily assess the significance, accuracy and reliability of national accounting concepts and estimates.

Australian Bureau of Statistics, Standards for Income Variables (1287.0) - Specifies ABS standards for the collection, processing, storage and dissemination of statistics on income. Topics covered include the ABS recommended definitions of concepts, classification criteria, code structures, questionnaire modules and output categories. Issues related to these standards are also discussed

Australian Bureau of Statistics, 2013, Measures of Australia’s Progress (Economy Domain) (cat. no. 1370.0) - This publication is designed to help Australians address the question, 'Is life in Australia getting better?' Measures of Australia's Progress provides a digestible selection of measures in answer to this question. Australians can use this evidence to form their own view of how our country is progressing. This 2013 release presents a refreshed set of indicators and new areas of progress, based on a public consultation process. See the Economy domain for more information.

Organisation for Economic Co-operation and Development (OECD), Social and welfare publications - The OECD.org website provides some of the latest analysis of economic wellbeing topics. These can be accessed from the home page by selecting the topic Social and welfare issues.


Consumption expenditure

Consumption expenditure is the value of consumer goods and services acquired, used or paid for by a household through direct monetary purchases, own account production, barter or as income in kind.


A method of standardising the income, expenditure or wealth of households to take account of household size and composition differences. For further information see Appendix 3 in the ABS publication Household Income and Income Distribution, Australia, 2011–12 (cat. no. 6523.0)

Financial stress

A range of items designed to provide a subjective measure of a household’s economic wellbeing. The financial stress questions asked in the ABS Household Expenditure Survey relate to cash flow problems and financial resources. The nine specific financial stress indicators are:
  • household spends more money than it gets (over the last 12 months)
  • unable to raise $2,000 in a week to pay for something important
  • could not pay electricity, gas or telephone bill on time
  • could not pay car registration or insurance on time
  • pawned or sold something
  • went without meals
  • could not afford to heat their home
  • sought assistance from welfare/community organisations
  • sought financial help from friends or family.


Income consists of all current receipts, whether monetary or in kind, that are received by the household or by individual members of the household, and which are available for, or intended to support, current consumption.

Income includes receipts from:
  • wages and salaries and other receipts from employment (whether from an employer or own incorporated enterprise), including income provided as part of salary sacrificed and/or salary package arrangements
  • profit/loss from own unincorporated business (including partnerships)
  • net investment income (interest, rent, dividends, royalties)
  • government pensions and allowances
  • private transfers (e.g. superannuation, workers' compensation, income from annuities, child support, and financial support received from family members not living in the same household).

Gross income is the sum of the income from all these sources before income tax, the Medicare levy and the Medicare levy surcharge are deducted. Other measures of income are Disposable income and Equivalised disposable household income.

Note that child support and other transfers from other households are not deducted from the incomes of the households making the transfers.

Low economic resource (LER) households

Low economic resource households are those that simultaneously have low income and low wealth. The ABS has developed an LER measure that includes households who are concurrently in the lowest four deciles (i.e. 40%) of both equivalised disposable household income (including imputed rent) and equivalised household net worth. It is a relative measure designed to identify people most at risk of experiencing economic hardship compared to measures using income or wealth alone.

Missing out experiences

A range of items designed to provide a subjective measure of a household’s economic wellbeing. The following 'missing out' questions are asked in the ABS Household Expenditure Survey.
  • could not afford holiday for at least one week a year
  • could not afford a night out once a fortnight
  • could not afford friends or family over for a meal once a month
  • could not afford special meal once a week
  • could only afford second hand clothes most of the time
  • could not afford leisure or hobby activities.

Net worth (wealth)

Net worth is the value of a household's assets less the value of its liabilities. Net worth may be negative when household liabilities exceed household assets.


National Sustainability Council, 2013, Sustainable Australia Report 2013: Conversations with the future, Department of the Environment

Australian Bureau of Statistics, 2013, Aspirations for our nation: A conversation with Australians about progress (cat. no.1370.0.00.002)

Australian Bureau of Statistics, 2013, Measures of Australia's Progress (cat. no. 1370.0)

McLachlan, R., Gilfillan, G. and Gordon, J. 2013, Deep and Persistent Disadvantage in Australia, Productivity Commission Staff Working Paper, Canberra

Connolly, C, 2014, Measuring Financial Exclusion in Australia, Centre for Social Impact (CSI), University of New South Wales, for National Australia Bank.